May 02 2018

Rupee opens lower as Dollar rally offsets RBI move to ease bond investment rule

Financial Market Overview

02nd May, 2018

Morning Coffee:-                                                                                  

MARKETS AT OPEN:-

Rupee:-

  • Indian rupee opens lower at 66.75 as a jump in the dollar index to four-month highs overshadows the central bank move to ease rules for foreign investment in the nation’s bonds. Pair USDINR now at 66.70, against 66.66 previous close.
  • Late Friday, the Reserve Bank of India said foreign investors would be allowed to invest in shorter tenure bonds, a move which would encourage inflows into the country’s bond market and help ease pressure on the rupee. The RBI also removed the residual maturity limits for investments in federal and state bonds, and reduced the maturity limit in corporate bonds to one year from three years previously.
  • Pair to tip in range between 66.55-66.85.

Indian Equities:-

  • Benchmark indices opened higher despite weakness in Asian stocks, backed by auto sales data.
  • The 30-share BSE Sensex was up 116.70 points at 35,277.06 and the 50-share NSE Nifty rose 30.50 points to 10,769.90.

Global Markets:-

  • Asian markets are mixed today. The Hong Kong’s Hang Seng is off 0.58%, the Shanghai Composite is down 0.38% while the Australian ASX200 is trading higher by 0.55%.
  • European markets finished higher on Monday with shares in France leading the region. The CAC 40 is up 0.68% while Germany’s DAX is up 0.25% and London’s FTSE 100 is up 0.15%.
  • S. stocks were mixed at the close on Tuesday, as gains in the Technology, Financials and Consumer Services sectors led shares higher while losses in the Telecoms, Oil & Gas and Consumer Goods sectors led shares lower. At the close in NYSE, the Dow Jones Industrial Average fell 0.27%, while the S&P 500 index added 0.25%, and the NASDAQ Composite index added 0.91%.
  • The dollar index rose by the most in over a week yesterday, turning positive for the year ahead of the Federal Reserve policy outcome later today. The U.S. central bank is expected to maintain status quo on interest rates and investor focus will be on any changes to the accompanying statement.
  • The rate of growth in the US economy’s manufacturing sector slowed, but remained solid in April, according to a report released on Tuesday. The Institute of Supply Management said its manufacturing purchasing managers’ index ticked down to 57.3 in April, from 59.3 the previous month. Economists had forecast a reading of 58.6.